1. Field of the Invention
The present invention relates to bulk cash, and in particular, to the banking systems, money remitters, and the tracking of bulk cash to its origin. In addition, the present invention relates to deposit slips. Moreover, the present invention relates to processes for sharing information and methods for tracking a remitter's activity.
2. Description of Related Art
A wire transfer is a system for sending money from one location to another via an electronic format. Wire transfers have existed for over 140 years as a way to safely and securely send money. It can be considered one of the oldest industries in the U.S. It began in 1871 when Western Union, one of the original 11 stocks included in the first Dow Jones Average, introduced it as a service. Western Union then began providing service to Europe, North Africa, North and South America, Australia and Asia in 1896.
A Money Remitter is a business entity that operates through a network of agents that are collecting cash on behalf of their customers with the goal of sending it to the customer's beneficiary. The collection of cash from the customer is part of what is herein referred to as a “transaction”. The Remitter's agent takes each individual's remittance and combines it together with the other individuals' remittances to make one cash deposit in the bank. Grouping multiple transactions into one deposit creates cost efficiency. This accumulating of multiple cash transactions into one amount is referred to as “bulk cash.” A Remitter's agent creates bulk cash and periodically to brings it to a bank.
The money remitter industry has grown steadily, with the last 20 years bringing double digit growth year over year. However, the events of Sep. 11, 2001 have changed the way regulators look at foreign money transfers.
In the past few years, governments worldwide have established several new policies to prevent improper use of financial institutions by criminals and terrorists. A number of businesses, such as money services businesses (MSB), travel agencies, jewelry stores, pawnshops, etc., have to comply with regulatory rules and requirements for the purpose of preventing fraud, money laundering, and terrorist financing.
According to the USA PATRIOT Act, financial institutions and money service businesses must authenticate the identity of an individual before executing any transaction for that individual. Under the PATRIOT ACT, banks have had a difficult time complying with the new laws imposed upon them. Banks have gone to great lengths to institute policies and programs that will ensure compliance with the law.
The implementation of the PATRIOT ACT placed far greater scrutiny on the banking industry's requirements to implement effective BSA (Bank Secrecy Act) programs and turned compliance into an industry all its own. For the last decade, banks have worked diligently to increase their compliance departments' ability to keep up with fraudulent and criminal acts that have been made possible by new technologies.
The relevant laws and regulations include a Know Your Customer (KYC) requirement. In addition, as part of a Money Service Business (MSB) KYC policy MSB's are also expected to effectively Know Your Customer's Customer (KYCC). However, it is extremely difficult to not only know your customer's activity, but to know your customer's customers activity when it involves cash and only limited information is available.
U.S. Bank regulators such as Federal Reserve Bank (FRB), Federal Deposit Insurance Corporation (FDIC), Office of Comptroller of Currency (OCC), and Office of Thrift Supervision (OTS) issued a joint statement, confirming that a financial institution has to file a Suspicious Activity Report (SAR) if the financial institution knows that its customer has violated any law.
Also, financial institutions and money service businesses must comply with the requirements of the Office of Foreign Assets Control (OFAC), prohibiting business activities with any entity on the blacklist periodically published by the OFAC. Moreover, under the Bank Secrecy Act, financial institutions and money service businesses are required to file a Currency Transaction Report (CTR) if transactions by a customer exceed $10,000 in cash on the same day. They must also file a Suspicious Activity Report (SAR) for any suspicious activity, including structured activities that attempt to avoid the filing of a CTR.
The increased importance of a bank's compliance department in implementing BSA laws and effective Know Your Customer policies has made it increasingly difficult for banks and Money Service Business's (MSB's) to work together. The result has been a decade long string of account closings and lost business relationships.
Special problems have arisen with a specific type of MSB referred to as Money Remitters. A money remitter, herein referred to as a remitter, is someone who specializes in wire transfers. When it comes to remitters, banks have found it easier to close the remitters' accounts rather than service them and risk financial and criminal penalties. Western Union is considered the largest money remitter in the world and even it has lost accounts with certain banks.
Remitters typically have in-house compliance programs and external reviews of these programs. Banks also have in-house compliance programs and external reviews. However, these two operations are uncoordinated.
It is common for remitters and their agents to collect cash from multiple customers and make one bulk deposit into a financial institution. The remitter then executes a wire through a financial institution to a correspondent remitter who receives one lump sum and then distributes cash to the respective customers' beneficiaries (see FIG. 1).
The financial institution receiving the remitter's bulk deposit and performing the wire does not have access to the details of the remitter's individual customers and cannot identify which customers are sending money, how much they are sending and who is receiving the funds. This makes it difficult for banks to comply with various BSA, Anti-Money Laundering (AML) laws, and the PATRIOT ACT.
Remitters also make their cash deposits on a standard bank deposit slip. A standard deposit slip does not make it possible to identify the source of the cash. In addition, the agent of the remitter typically does not deposit exact amounts creating either a receivable or payable making it further difficult for the bank to understand the activity of the remitter.    Cash—For purposes of this application, cash refers to the physical currency printed on banknotes as well as coins that may be exchanged for goods or services. More specifically, in reference to this patent application, cash refers to any instrument that may be deposited in a traditional commercial bank account for credit in a customer's account.    Bulk Cash—refers to a large quantity of paper money or coins. More specifically, in reference to this patent application, bulk cash refers to the grouping of multiple cash transactions into one amount for a bulk deposit into a financial institution. These deposits of cash may represent one or more transactions on behalf of a third-party and the details of the third-party are often considered to be unknown to the financial institution in which the bulk cash is being deposited.    Deposit Slip—A small written form that is used to deposit funds into a financial institution.
A deposit slip typically indicates the date, the name of the depositor, the depositor's account number and the amounts of checks, cash and coin being deposited. In a traditional deposit slip, the lines that state the words “cash”, “coins” and “checks” are there to signify the type of currency being deposited into the account. It is not a reference to the origins of the currency. Cash being deposited into a bank account can be for many reasons including income earned from sales in the ordinary course of business, refunds, customer deposits, investments into a company, additional amounts paid as capital from the owner(s), escrow, etc.
See also U.S. Pat. Nos. 5,978,780; 7,114,649; 7,246,741; 7,881,996; and 7,882,031, as well as US Patent Publication Nos. 2003/0233319; 2005/0038748; 2005/0071268; 2005/0108164; and 2007/0063016.